Escrow is the process by which the interests of all parties in a real estate transaction are protected, ensuring that all conditions of the sale have been met before property and money change hands.
Escrow is an independent depository wherein all funds, instructions, and documents for the purchase of your home are held, including your down payment, your lender's funds, documents for the new loan, hazard and title insurance, inspection reports, and the grant deed from the seller. At the close of the escrow, the "escrow holder" delivers these items to the appropriate parties, disburses the funds, and handles the associated paperwork.
The Escrow Holder is a neutral third party that maintains the escrow account and impartially oversees the escrow process, making sure all conditions of the sale are properly met. The Escrow Holder's Duties are not limited from just overseeing the process, they also excercise other administrative responsibilities.
Your escrow is created shortly after you execute the purchase agreement to sell your home. It cannot be successfully completed until all escrow instructions have been carried out and all parties have signed escrow documents. The time it takes from opening of escrow to closing of escrow can range from a few days to several months, depending on the terms of the purchase agreement. On Average, an escrow's life closes within 45 days.